TMI Blog2017 (6) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... is the assessee’s contractual obligation and the onus is on it to make suitable arrangements for timely payment for salary of, and other expenditure incurred by, it’s employees. Why, the payment could be made directly to the bank accounts of the employees. In fact, even in India the salary is customarily paid by the 7th of the following month, and also legally required to be paid within a reasonable time; presumably, the 10th day thereof. The relevant law/s of UAE assumes significance in this regard, which shall have to explain both, the salary as well as other expenditure. Further, not only does the ‘service recipient’ agree to make the payment in the first instance, it extends a 90 day credit to the assessee for the same, which is surpri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA Nos.397 & 398/Mds/2014 - - - Dated:- 30-6-2017 - SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER For the Appellant : Ms. S.Deepika, Advocate For the Respondent : Shri P.Nagendra Kumar, Jt. CIT ORDER Per Sanjay Arora, AM: This is a set of two appeals by the Assessee directed against the Order by the Commissioner of Income Tax (Appeals)-VII, Chennai ( CIT(A) for short) dated 01.01.2014, dismissing the assessee s appeals contesting its assessment u/s. 201(1)/201(1A) of the Income Tax Act, 1961 ( the Act hereinafter) for assessment years (AYs) 2010-11 2011-12 of even date, i.e., 15/12/2011. 2. The issue arising in the instant appeals is the nature of the payments, debited to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which we were taken through during hearing. The reason for GOS paying salaries of the assessee s employees is stated to be to observe the UAE laws, which oblige the service recipient to timely pay for even contracted labour, and toward which copy of the Minutes dated 17/6/2009 (at PB-I/pg.19), stated to be furnished before both, the Assessing Officer (AO) and the ld. CIT(A), was referred to during hearing. Though the same, as point out thereat, does not bear the signature of the assessee s representative, nor in fact states of his presence thereat, so that it is a unilateral document and, therefore, by itself of no moment, the fact remains that the debit notes have been raised by GOS on the assessee. Then, again, the question arises as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oluments are normally not divulged, as in that case the contractee would get a clear idea of the assessee s employee cost, which constitutes the principal cost, enabling it to bargain for a lower cost on its contract with the assessee. The assessee clearly has much explaining to do; it s case, though valid in principle, is largely unsubstantiated, with several loose ends. In fact, the Revenue s stand (refer para 2) itself, as a reading of the orders by the Revenue authorities shows, is based on the assessee s explanation of GOS rendering services to Info-Drive LLC, UAE at the behest of the assessee-company, depicting thus also an inconsistency in it s (assessee s) stand. The Revenue s stand, we may at the same time state, does not take i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In this context, it may be added that the ld. Authorized Representative (AR), on being asked by the Bench during hearing as to how does the assessee s stand effectively helps it s case in-as-much as even considering the payment made, to the extent proved, being on account of salary, the same would warrant deduction of tax at source u/s. 192, could not furnish any satisfactory answer. This aspect would therefore require being examined. Also, the functional role of Info-Drive LLC, UAE, having been ostensibly specifically incorporated/instituted to facilitate the execution of the projects undertaken by the assessee in UAE, cannot be obscure, and would therefore require being shown. The agreements entered into by Info Drive LLC, UAE, as well ..... X X X X Extracts X X X X X X X X Extracts X X X X
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